Personal Finance in Your 20s For Dummies

by Tyson, Eric

• ISBN13: 9780470769058
• ISBN10: 047076905X
• Format: Paperback
• Copyright: 2011-01-25
• Publisher: For Dummies

Summary

The easy way to avoid early pitfalls on the road to financial successA little money and a little time is all that's needed to lay a strong financial foundation for today and the future. And starting sooner rather than later is the smartest thing you can do when it comes to protecting your financial future.If you're in college or enjoying your twenties, Personal Finance in Your 20s For Dummies cuts to the chase, providing you with the targeted financial advice you need to establish a firm financial footing as you work your way through school and the post-graduation years. Advice on paying off student loans, managing debt, and creating a solid pathway to financial success Investing strategies for young investors Other titles by Tyson: Personal Finance For Dummies, Investing For Dummies, and Mutual Funds For DummiesIf you're looking for sound, reliable advice on how to make smart financial choices in the real world, Personal Finance in Your 20s For Dummies has you covered.

Author Biography

Eric Tyson, MBA, (www.erictyson.com) is an internationally acclaimed and best-selling personal finance book author, syndicated columnist, and speaker. He is also the author of the national bestsellers Investing For Dummies and Home Buying For Dummies.

Table of Contents

Introduction	p. 1
About This Book	p. 1
Conventions Used in This Book	p. 2
What You're Not to Read	p. 2
Foolish Assumptions	p. 3
How This Book is Organized	p. 3
Building Your Foundation	p. 3
Grown-up Stuff	p. 4
Earning More (And Keeping More of What You Earn)	p. 4
Insurance: You're Not as Invincible or Independent as You Think!	p. 4
Your Information Diet	p. 5
The Part of Tens	p. 5
Icons Used in This Book	p. 5
Where to Go from Here	p. 6
Building Your Foundation	p. 7
Your Financial Checkup	p. 9
Calculating Your Worth	p. 10
Defining net worth	p. 10
Figuring what you own: Financial assets	p. 10
Determining what you owe: Financial liabilities	p. 12
Netting the difference	p. 12
Grasping the Importance of Savings	p. 12
Netting your income and spending	p. 13
Assessing the change in your net worth	p. 13
Understanding and Improving Your Credit Score	p. 15
Deciphering how lenders use credit reports and scores	p. 15
Obtaining your credit reports and fixing errors	p. 16
Getting your credit score	p. 17
Improving your credit reports and score	p. 19
Comprehending Your Investment Options	p. 20
Examining Insurance Coverage	p. 21
Identifying Common Financial Mistakes	p. 22
Making the Best Use of Bank Accounts	p. 25
Identifying Your Options	p. 25
Brick-and-mortar banks	p. 26
Online banks	p. 27
Other choices	p. 27
Understanding Your Banking Account Options	p. 27
Transaction accounts	p. 28
Options for getting cash	p. 29
Savings accounts	p. 29
Banking Online	p. 30
Evaluating a bank: What to look for	p. 30
Protecting yourself online	p. 32
Considering Your Alternatives	p. 33
Brokerage accounts with check-writing	p. 34
Money market funds	p. 34
Budgeting and Saving	p. 35
Developing a Savings Mind-Set	p. 36
What It's Worth: Valuing Savings over Time	p. 38
The difference of continual savings	p. 38
The difference of a few percent return	p. 39
Budgeting and Boosting Your Savings	p. 40
Setting and Prioritizing Your Savings Goals	p. 42
Identifying common goals of accomplished savers	p. 42
Valuing retirement accounts	p. 43
Dealing with competing goals	p. 45
Saving When You're Strapped	p. 45
How to Spend Less and Save More	p. 47
Hemming Housing Costs	p. 47
Containing rental costs	p. 48
Slicing homeowner expenses	p. 50
Cutting Your Taxes	p. 52
Managing Food Costs	p. 52
Trimming Transportation Expenses	p. 54
Finessing Fashion Finances	p. 55
Recreating on a Budget	p. 56
Taming Technology Spending	p. 56
Keeping Down Insurance Costs	p. 57
Getting Professional Advice	p. 58
Handling Healthcare Expenses	p. 59
Using Loans and Paying Down Debts	p. 61
Eyeing the Causes of Generational Debt	p. 61
Making the Most of Loans	p. 62
Working Off Consumer Debt	p. 63
Kicking the credit card habit	p. 63
Discovering debit cards: Convenience without credit temptation	p. 64
Lowering your credit card's interest rate	p. 65
Tapping investments to reduce consumer debt	p. 67
Paying down balances	p. 67
Getting Help for Extreme Debt	p. 68
Seeking counseling	p. 68
Considering bankruptcy	p. 70
Preventing Consumer Debt Relapses	p. 73
Grown-up Stuff	p. 75
Everything Credit: Scores and Reports	p. 77
The Lowdown on Credit Reports and Credit Scores	p. 78
Differentiating between credit reports and credit scores	p. 78
Understanding how credit scores are determined	p. 79
Knowing the value of a good credit score	p. 80
Jump-starting your credit score	p. 81
Getting Your Hands on Your Credit Reports and Scores	p. 82
Scrutinizing Your Credit Reports to Improve Them	p. 83
Identifying errors and getting them fixed	p. 83
Boosting your credit score	p. 84
Preventing Identity Theft	p. 85
Housing: Comparing Renting and Buying	p. 89
The Ins and Outs of Renting	p. 89
Seeing the benefits of renting	p. 90
Considering the long-term costs of renting	p. 90
Completing your rental application	p. 91
Figuring the Costs of Owning and Making It Happen Financially	p. 92
Deciding to buy	p. 92
Comparing the costs of owning versus renting	p. 93
Considering your overall financial health	p. 94
Calculating how much you can borrow	p. 94
Accumulating your down payment	p. 95
Finding the Right Property	p. 96
Working with Real Estate Agents	p. 98
Financing Your Home	p. 98
Understanding your mortgage options	p. 98
Deciding which mortgage type is best for you	p. 99
Avoiding negative amortization and Interest-only loans	p. 101
Getting your mortgage approved	p. 102
Putting Your Deal Together	p. 103
Relationships and Money	p. 105
Handling Roommates	p. 105
Living-Together Contracts	p. 107
Getting Married	p. 108
Earning More (And Keeping More of What You Earn)	p. 111
Making the Most of Your Career	p. 113
Getting Your Career Going	p. 113
Putting everything in order	p. 113
Educating and training your way to career success	p. 114
Seeking value for your education dollars	p. 115
Investing in your career	p. 116
Exploring Entrepreneurial Options	p. 117
Starting a small business	p. 117
Purchasing a small business	p. 118
Investing in a small business	p. 118
Changing Jobs or Careers	p. 119
The Young and the Unemployed	p. 120
Understanding how joblessness hits younger people harder	p. 121
Accessing unemployment benefits	p. 121
Taking action	p. 122
Taxes: Reduce Them or Else!	p. 123
Understanding Taxable Income	p. 123
Comparing Marginal Taxes	p. 124
Reducing Taxes on Work Income	p. 125
Contributing to retirement plans	p. 125
Using health savings accounts	p. 128
Deducting self-employment expenses	p. 128
Increasing Your Deductions	p. 130
Lowering Investment Income Taxes	p. 132
Investing in tax-free money market funds and bonds	p. 132
Selecting other tax-friendly investments	p. 132
Making your profits long term	p. 133
Enlisting Education Tax Breaks	p. 133
Preparing Your Tax Return and Minimizing Your Taxes	p. 134
Successful Investing Principles	p. 137
Understanding Investments	p. 137
Examining bonds and other lending investments	p. 137
Exploring stocks, real estate, and small-business investments	p. 140
Getting a Handle on Investment Risks	p. 146
Establishing goals and risks	p. 146
Comparing the risks of stocks and bonds	p. 147
Spreading Your Investment Risks	p. 148
Understanding why diversification is key	p. 148
Allocating your assets	p. 149
Holding onto your investments and shunning the herd	p. 150
Selecting an Investment Firm	p. 151
Evaluating Pundits and Experts	p. 152
Portfolios for a Purpose	p. 153
Before You Begin Investing	p. 153
Investing Nonretirement Account Money	p. 154
Emergency money	p. 154
Long-term money	p. 155
Investing Retirement Account Money	p. 159
Establishing and prioritizing retirement contributions	p. 159
Allocating money in employer plans	p. 160
Designating money in plans you design	p. 162
Investing for Education	p. 164
Understanding the importance of applying for financial aid	p. 164
Paying for educational costs	p. 167
Insurance: You're Not as Invincible or Independent as You Think!	p. 171
The Lowdown on Health Insurance	p. 173
Making Sure That You're Covered	p. 174
Transitioning your coverage	p. 174
Seeing how the 2010 healthcare laws make coverage easier	p. 175
Finding Your Best Health Plan	p. 177
Selection of doctors and hospitals	p. 177
Plan benefits and features	p. 178
Shopping for Health Insurance	p. 179
Uncovering the best Policies	p. 179
Handling rejection	p. 180
Health Savings Accounts: Tax Reduction for Healthcare Costs	p. 181
Safeguarding Your Income	p. 183
Protecting Your Income for You and Yours: Disability Insurance	p. 183
Understanding disability coverage you may already have	p. 184
Determining your need for disability coverage	p. 185
Identifying useful disability policy features	p. 186
Shopping for coverage	p. 187
Protecting Your Income for Dependents: Life Insurance	p. 187
Assessing your current life insurance coverage	p. 188
Determining how much life insurance to buy	p. 189
Deciding what type of life insurance to buy	p. 189
Shopping for life insurance	p. 190
Caring for Your Loved Ones: "Peace of Mind" Insurance	p. 191
Home, Auto, Renters, and Other Insurance Policies	p. 193
Protecting Your Home and Possessions	p. 193
Dwelling coverage	p. 194
Personal property protection	p. 195
Liability insurance	p. 195
Natural disaster protection	p. 196
Shopping for homeowners insurance	p. 196
Insuring Your Car	p. 198
Liability protection	p. 198
Collision and comprehensive	p. 199
Riders you should bypass	p. 200
Getting a good buy	p. 200
Your Information Diet	p. 203
Using Media Resources	p. 205
Going Online: The Wild West of Advice and Predictions	p. 206
Eyeing the real cost of "free"	p. 206
Being aware online	p. 207
Using the Web for gathering Information	p. 208
Getting Financial Perspectives and Advice from the Media	p. 210
Professionals You Hire	p. 213
Considering Financial Advisors	p. 213
Preparing to hire a financial advisor	p. 214
Finding good financial advisors	p. 215
Interviewing advisors	p. 216
Taming Your Taxes with Help	p. 218
Working with Real Estate Agents	p. 219
The Part of Tens	p. 221
Ten Ways to Save on a Car	p. 223
Don't Buy a Car in the First Place	p. 224
Pay Cash: Shun Leasing and Borrowing	p. 224
Consider Total Costs	p. 225
Compare New with Used	p. 225
Understand a Car's Real Value before Negotiating	p. 226
Take Care of Your Car	p. 226
Explore Your Servicing Options	p. 226
Drive Safely	p. 227
Take a Lean and Mean Insurance Policy	p. 227
Track Tax-Deductible Auto Expenses	p. 228
Ten Things to Value More Than Your Money	p. 229
Investing in Your Health	p. 229
Making and Keeping Friends	p. 230
Appreciating What You Have	p. 230
Minding Your Reputation	p. 230
Continuing Education	p. 231
Having Fun	p. 231
Putting Your Family First	p. 231
Knowing Your Neighbors	p. 232
Volunteering and Donating	p. 232
Caring for Kids	p. 232
Index	p. 235
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